UNITED STATES TAX COURT
NNABUGWU C. EZE,
Petitioner,
Vs.
COMMISSIONER OF INTERNAL
REVENUE,
Respondent
Docket No.: 21425—19
POST-TRIAL BRIEF
Petitioner files this Post-trial brief and will argue that the Petitioner has satisfied all the
requirements of USC 26 U.S.C. § 7491(a). In that regard, the Petitioner states as follows:
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PETITIONER’S POST TRIAL BRIEF
TABLE OF CONTENTS
TABLE OF CONTENTS 2
TABLE OF AUTHORITIES 3
FACTUAL BACKGROUND 4
ARGUMENT 6
Petitioner complied with the requirements of USC 26 U.S.C. § 7491(a) 6
CONCLUSION 10
CERTIFICATE OF SERVICE 12
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PETITIONER’S POST TRIAL BRIEF
TABLE OF AUTHORITIES
Cases
INDOPCO, Inc. v. Comm’r, 503 U.S. 79, 84 (1992) 6
Welch v. Helvering, 290 U.S. 111, 115 (1933) 6
Statutes
26 U.S. Code § 7491 (a) (1) 7
26 U.S.C. § 7491(a) 1, 6
Rules
Tax Court Rule 142(a) 6
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PETITIONER’S POST TRIAL BRIEF
FACTUAL BACKGROUND
The taxpayer ran a consulting and home construction business in 2015 and 2016. He
paid/incurred necessary and ordinary expenses as a result of running of the business. He created
and maintained mileage logs, invoices, receipts showing trips, purpose of the trips, people he was
in consultation with, payment and other evidence. The taxpayer thus made valid and deductible
payments on qualified mortgage insurance in 2016 on his primary residence. Interestingly, IRS
ignored the evidence presented before it despite the multiple submissions.
Petitioner filed a Petition on or about December 3, 2019 at this Court. Notably, Petitioner
denied the notice of deficiency (NOD) due to absence of any affirmative allegations regarding
disallowance of all expenses. The authenticity and relevance of documentation presented by the
petitioner in regards to petitioner C1 and C2 business was indicated by the respondent during the
trial and March 28, 2022 Pretrial memorandum. Other than misprint error or “Tx” error on one of
the phone records, the respondent approved that the other documentation for C1 and C2 totaling
$190,775 were authentic. The matter of contention was on the phone expenses totaling $7,676
which was not corroborated by the witnesses subpoenaed by the respondent Tx &T and Cricket
Wireless since the witnesses defaulted.
The compliance department of the Respondent commenced the audit for 2015 tax year in
2016 and added tax year 2016 in 2017. The case was then sent to the Respondents in 2019. In the
Petitioner’s documentation, the Petitioner provided documents to the Compliance Department
but there was no documents emanating from the Compliance department, Respondent, expert
witnesses or any other third parties in reference to the authenticity of the Petitioner’s
documentation.
Upon response of the Petitioner on Form 91f motion filed by the Respondent to force
stipulation, the judge requested more items be added to the Respondent’s motion. The
Respondent refused to add the additional items in the list as ordered by the court. For instance,
the Respondent on the March 28, 2022 pretrial Memorandum, had listed the individuals the
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PETITIONER’S POST TRIAL BRIEF
Petitioner had home improvement contracts with as a potential motion to enforce subpoenas on
the individual Petitioners. The Respondent however did not include the Home improvement
contracts as part of the documentation during trial.
During trial, the Respondent contented that the Petitioner failed to provide names of the
people that may have aided the Petitioner with Home improvement business. Item 32 (Exhibit
16-P Petitioner’s insurance ID card) provided by the Respondent contains the name of one of the
two individuals mentioned by the Petitioner during trial under the Petitioner’s name of the card.
Petitioner asserts that the Respondent and Judge’s allegation that during the trial, the Petitioner, a
reputable person in Maryland, may have stood outside the Home Depot and collected receipts
totaling $176,288 (2015-77,013 and 2016-99,275) from customers is outrageous. The
Respondent called into question all the documents without evidence or any witness testimonies.
The Petitioner calls upon the Judge to accept all documents to which the Respondent has no
documented proof of authenticity because the Respondent indicated the intention to call
representatives of the IRS to testify on the examination and issues in the case, on page 3 of the
Respondent’s pretrial memorandum. Additionally, in an attempt to authenticate business records,
the Petitioner agrees that the IRS representatives /Compliance team would be in a position to
authenticate the business records. The representatives not only failed to show for the trial but
also did not send any signed documentation in support of the Respondent’s allegations.
In the 2015 and 2016 tax years, the Petitioner earned $256,825 in 1099 income and spent
$198,451 in expenses, with a net of $58,364. The Respondent continues to question the source of
the money used for expenses yet Petitioner’s wife was available for support.
The judge did not also look at Laguardia airport location on the mileage log without
checking the full address on the calendar. The Respondent did not include the second mileage
log with the full address.
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PETITIONER’S POST TRIAL BRIEF
Reasons for disagreement with IRS’s decision on the Case
IRS had dismissed the deduction of $6,667 for car and truck expenses and $77,013 for
other ordinary and necessary expenses. The expenses had been incurred in connection with
operation of the tax payer’s home construction business for 2015 tax year. The expenses had
been substantiated per Sec 274 of the IRC.
IRS also disallowed deduction of $9,655 for car and truck expenses and $99,275 for
ordinary and necessary expenses. The expenses had been incurred in connection with operation
of the taxpayer’s home construction business for 2016 tax year. They had been substantiated in
accordance with Sec 274 of the IRC.
IRS had also disallowed the deduction of $21,490 for car and truck expenses and $11,451
for other expenses for ordinary and necessary expenses incurred in the running of the taxpayer’s
consulting business for 2015 tax year. This was despite substantiation per Sec 274 of the IRC.
Further, IRC disallowed deduction of $30,533 for car and truck expenses and $8,579 for
other expenses for ordinary and necessary expenses incurred in running of the taxpayer’s
business for 2016 tax year. This was despite substantiation per Sec 274 of the IRC.
The IRS also dismissed $2,847 of qualified mortgage insurance premium that was paid
by the taxpayer I 2016 on his primary residence.
Lastly, the taxpayer has no liability for the increase in tax of $39,241 for 2015 and
$45,735 for 2016 or the penalty of $7,848.20 for 2015 and $9,147 for 206. The reason being, he
filed his taxes on time, claimed valid substantiated deductions of schedule C business expenses
and home mortgage insurance.
ARGUMENT
Petitioner complied with the requirements of USC 26 U.S.C. § 7491(a)
The taxpayer bears the burden of proving the Commissioner’s determinations are
erroneous. Tax Court Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933). The burden of
proof may shift to the IRS if the taxpayer establishes that he or she complied with the
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PETITIONER’S POST TRIAL BRIEF
requirements of 26 U.S.C. § 7491(a) to substantiate items, to maintain required records, and to
cooperate fully with the IRS’s reasonable requests.
Petitioner further avers that, as a taxpayer, he has the burden of proving (and
substantiating with adequate records) his entitlement to any deductions claimed. Rule 142(a);
INDOPCO, Inc. v. Comm’r, 503 U.S. 79, 84 (1992); 26 U.S.C. § 6001.
Rule 142(a) (1) specifically provides that:
The burden of proof shall be upon the petitioner, except as otherwise provided
by statute or determined by the Court; and except that, in respect of any new
matter, increases in deficiency, and affirmative defenses, pleaded in the
answer, it shall be upon the respondent. As to affirmative defenses,
Further, 26 U.S. Code § 7491 (a) (1) provides that “[i]f, in any court proceeding, a
taxpayer introduces credible evidence with respect to any factual issue relevant to ascertaining
the liability of the taxpayer for any tax imposed by [the Code], the Secretary shall have the
burden of proof with respect to such issue.” In order to qualify for a shift in the burden of proof
on a factual issue, a taxpayer must satisfy the requirements of section 7491 (a) (2): (1) the
taxpayer must have complied with all applicable substantiation requirements; (2) the taxpayer
must have maintained all required records and cooperated with reasonable requests by the IRS
for witnesses, information, documents, meetings, and interviews.
In the instant action, the Petitioner avers that he has duly satisfied his burden of proof
regarding the allegations in the Petition.
First, Petitioner concedes $24 in interest for tax year 2015 and $13 in interest for tax year
2016.
Next, in support of the entitlement to C1 Expenses, Petitioner provided the following
information:
i. Cricket wireless receipts;
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PETITIONER’S POST TRIAL BRIEF
ii. ATT U-verse Statements;
iii. Payment summary from Liberty Christian School- added as professional
education but should have been added as child care expense on return;
iv. Calendars- they provided completed addresses where Petitioner drove for Home
Improvement business and doctor’s offices for IT business;
v. Contracts. Petitioner notes that on page 7, on Respondent’s March 28, 2022
pretrial memorandum, Respondent states that he received contracts from
Petitioner which connects mileage logs to home improve business but Respondent
did not forward all documents on stipulated facts and still states there is no
evidence tying Petitioner’s mileage logs to his home improvement business;
vi. Contemporaneous mileage logs. These are the only logs that were non-
contemporaneous where the logs with the complete addresses provided to
compliance. The logs provided with incomplete address were contemporaneous;
vii. Invoices from Tire House Auto Center. Petitioner took standard mileage and not
actual mileage. Petitioner contends that actual mileage requires a taxpayer to
provide maintenance receipts but for reasons known to Respondent and its agents,
they continued to request that Petitioner provide this invoice;
viii. Copy of Petitioner’s insurance ID card. The card shows three vehicles- 2
of which were used in Petitioner’s two business- Mercedes and Ford expedition.
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PETITIONER’S POST TRIAL BRIEF
In support of the Petitioner’s entitlement to C2 Expenses, Petitioner provided thus:
i. Home Depot Receipts, Lowes Receipts and 84 Lumber Receipts- These were all
paid in cash and per Petitioner’s testimony during trial, the payments were made
in cash because Petitioner at the time had a money market savings account that
Petitioner received payments from National Computer Services. Money market
accounts at the time cannot be used at Point of sale but can be used at ATMs.
Petitioner was asked about credit cards and he informed the court that he has a
student loan default for decades that IRS is well aware of because Petitioner’s
refunds are always scheduled to be intercepted. When one defaults on a federal
loan, one is unable to given any type of credit.
ii. Contemporaneous mileage logs- the only logs that were non-contemporaneous
where the logs with the complete addresses provided to compliance. The logs
provided with incomplete address were contemporaneous.
iii. Bank Statement. According to Petitioner’s testimony during trial, Petitioner
provided bank statement to Respondent via email but this was one of many
documents not listed on the stipulated facts just like Respondent listed on pretrial
memorandum to subpoena individuals that were under contact with Petitioner on
Petitioner’s home improvement business but Respondent failed to include the
contracts and invoices provided to Respondent for trial. It is therefore unclear
where all these names on the memorandum come from. Also, Petitioner’s 1099
income from his IT business clearly is enough income to support Petitioner’s
Home Improvement business; even if it did not then Petitioner’s wife listed on the
mortgage interest statement and on. Petitioner asserts that exhibit 16-P would be
able to provide support.
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PETITIONER’S POST TRIAL BRIEF
iv. Work Authorization Forms. Petitioner notes that the forms are listed on page 7 of
Respondent’s March 28, 2022 pretrial memorandum. The Respondent states that
it received Work Authorization Form which states that Petitioner was required to
travel to medical professionals offices for the new Electronic Health Records
system but Respondent did not include this document as part of the stipulated
facts (like the home improvement contracts) for trial and still claims Petitioner
provided no evidence tying his travel to his Information Technology business.
Petitioner further contends that the Respondent has since failed to meet its burden of
proof. For instance, the Respondent called into question all the documents without evidence or
any witness testimonies. Accordingly, the Petitioner calls upon the Judge to accept all documents
to which the Respondent has no documented proof of authenticity because the Respondent
indicated the intention to call representatives of the IRS to testify on the examination and issues
in the case, on page 3 of the Respondent’s pretrial memorandum. Additionally, in an attempt to
authenticate business records, the Petitioner agrees that the IRS representatives /Compliance
team would be in a position to authenticate the business records. The representatives not only
failed to show for the trial but also did not send any signed documentation in support of the
Respondent’s allegations. Further, the phone expenses totaling $7,676 was not corroborated by
the witnesses subpoenaed by the Respondent Tx &T and Cricket Wireless since the witnesses
defaulted.
CONCLUSION
In short, the Plaintiff has sufficiently met his burden to prove the averments in the
Petition. The Respondent has in turn failed to meet its burden of proof as alleged hereinabove.
Accordingly, this matter should be held in Petitioner’s favor, in the interest of justice.
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PETITIONER’S POST TRIAL BRIEF
DATED:
Respectfully submitted,
Signature
NNABUGWU C. EZE
(443) 316-1334
Petitioner, Pro Se
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PETITIONER’S POST TRIAL BRIEF
CERTIFICATE OF SERVICE
I hereby certify that on [ENTER DATE], a copy of the foregoing Brief has been filed in
this Court and a copy thereof sent to the Respondent in the following address:
[ENTER ADDRESSES FOR RESPONDENT].
Signature
NNABUGWU C. EZE
(443) 316-1334
Petitioner, Pro Se
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